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AltaGas Enters Infrastructure Agreement with Painted Pony

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   |    Friday,October 31,2014

AltaGas has announced 3Q 2014 operational results.

Highlights

• $16.6 million in normalized net income and $104.9 million in normalized EBITDA;
• $79.9 million in normalized funds from operations;
• Commissioned Forrest Kerr, the largest project in AltaGas' history; and
• 15-year strategic alliance signed with Painted Pony Petroleum Ltd.

AltaGas Ltd. has reported third quarter normalized net income of $16.6 million ($0.13 per share), compared to $24.7 million ($0.21 per share) in the same period 2013. 

David Cornhill, Chairman and CEO of AltaGas said: "We continue to deliver on our growth plans and have built out a very competitive service offering to connect producers from well head to new markets through energy exports.  

The strategic alliance we signed with Painted Pony in the quarter is a direct result and we continue to discuss opportunities with other producers. In October we also reached a significant milestone as we completed Forrest Kerr, the largest project in our history."

In the third quarter, earnings and cash flow were driven primarily by higher natural gas volumes processed, ownership of Petrogas, and small contributions from Forrest Kerr. These positive earnings contributions in the quarter were more than offset by the lower contribution from Alberta power assets, compared to the third quarter 2013.

 

On a GAAP basis, net income applicable to common shares was $16.6 million ($0.13 per share) for the three months ended September 30, 2014, compared to $43.3 million ($0.36 per share) for the same period 2013. Third quarter 2013 included one-time after-tax net gains related to assets of $18.7 million.

In the third quarter, AltaGas signed definitive agreements with Painted Pony Petroleum Ltd. to enter into a 15-year strategic alliance for the development of processing infrastructure and marketing services for natural gas and natural gas liquids.

In the first phase of the strategic alliance, AltaGas plans to construct and operate the Townsend Facility, a 198 Mmcf/d shallow-cut gas processing facility in the Montney area. Painted Pony will maintain the right to a minimum 150 Mmcf/d of firm capacity in the Townsend Facility.

Energy Exports

AltaGas continues to advance its Liquefied Petroleum Gas (LPG) export initiatives.

AltaGas is operating Petrogas' Ferndale facility in the State of Washington, which sent two cargoes of LPG to Asia in the third quarter.

Export capacity at the Ferndale facility is expected to ramp up to 30,000 Bbls/d over the next several years.

AltaGas Idemitsu Joint Venture Limited Partnership (AIJVLP) continues to make progress on building an LPG export business off Canada's west coast for an additional 30,000 Bbls/d. AIJVLP has been in active negotiations for potential site locations.

In addition to LPG, AIJVLP is working with various parties to support the Companies' Creditors Arrangement Act (CCAA) Plan of Arrangement proceedings for the Douglas Channel LNG project. On October 29, 2014, the Supreme Court of British Columbia (the "Court") approved the Plan of Arrangement for filing and distribution to creditors. Creditors are to review the Plan of Arrangement and vote on it. With a positive vote, the Plan of Arrangement will proceed to be sanctioned by the Court and become effective thereafter, upon satisfying other conditions prescribed in the Plan of Arrangement including finalization of transaction documents and approval of the PNG agreement from the British Columbia Utilities Commission.